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Sorry, if this exists already, but it doesn't come up searching, "price negotiation" so I think many others like me will never see it. So...here's another discussion.
I'm looking to buy my first car. The one I'm looking at is the 2014 Mitsubishi Lancer GT Manual Sedan. I've read a lot of these "us vs. them" type of guides. I've read about MSRP, Dealer Invoice, True Dealer Cost, Factory-to-Dealer Incentives.
Currently, I'm pretty sure a fair offer is somewhere between $16k to $17k for a base GT model(not including tax/destination fee/etc). As I've said, I'm totally new to all this and am not sure if I'm looking at these things correctly.
The listed MSRP in my area is $21,240. I've seen the car for 20,990(down to 18,490 after various factory rebates totaling $2500). As far as all the online sources stating Fair Market Price and Dealer Invoice for this vehicle, they are all 19k-20k, which, in this case, is fine, considering the rebates are from the manufacturer.
But here's the kicker: I've found one dealership that I can get the vehicle for 18500 BEFORE factory rebates. After would be 16k. I'm going out on a limb and thinking this dealership will still be making a profit off this car even at this low price. I'm thinking the $2500 rebate is actually kind of a preemptive Factory-to-Dealer incentive. I mean, it wouldn't make sense for the dealer to pay another $2500 to the factory to cover the factory-offered rebate. But the consumer is paying the dealer the $2500 and being reimbursed by the factory. In effect, it's basically a $2500 bonus to the dealer. Unless I'm looking at this all wrong.
So, removing that bonus and also Mitsubishi's holdback(which should be 2%, The true dealer cost should be closer to $15,575. Offering them 3-9% profit would be in the 16-17k range. Then all the tax and other fees piled on top to be paid by me...
Pretty long winded, but I tried to be as detailed as possible. Hopefully someone can shed some light on this and tell me whether I'm doing this right or wrong. One way or the other, it'll be helpful information for myself and any other wayward new car buyer.
Thanks in advance!